Different Angles

Korean subsidiaries of foreign multinational companies such as Apple, Microsoft, McDonald's Korea, Louis Vuitton, Chanel and Gucci entered the Korean market as a joint-stock corporation, but all of them became LLCs after 2011.
Korean subsidiaries of foreign multinational companies such as Apple, Microsoft, McDonald's Korea, Louis Vuitton, Chanel and Gucci entered the Korean market as a joint-stock corporation, but all of them became LLCs after 2011.

 

A big damage has been done on a revised bill which makes it obligatory for the foreign companies registered in Korea as a limited liability company (LLC), including Apple Korea, Microsoft Korea, Chanel and Gucci, to disclose their financial statements.  

According to financial regulators on March 27, the government’s Regulatory Reform Committee demanded that a revised bill of the Act on External Audits of Joint-Stock Corporations be changed, saying that it was inappropriate to make it compulsory for foreign LLCs to make public disclosures.

Earlier, the Financial Supervisory Commission issued an advance notice of the revised bill which expands the scopes of companies subject to external audits and public disclosures to foreign LLCs in the Commercial Act, non-profit corporations and big non-listed companies.

Korean subsidiaries of Apple, Microsoft, McDonald's Korea, Louis Vuitton, Chanel and Gucci among others entered the Korean market as a joint-stock corporation. But all of them became LLCs after 2011. At that time, a revision of the Commercial Law nearly did away with differences between the joint-stock corporation and the LLC. But unlike joint-stock corporation, LLC did not need to receive external audits and disclose their financial statements. That brought about the change.         

So, such foreign companies’ transformation was blasted by many people who said that the transformation was cheating to avoid regulations in Korea.    

The Regulatory Reform Committee seemed to judge that it is not a big deal to have LLCs undergo audits but it would be an excessive regulation to make it obligatory for them to make public disclosures. The committee explained that the obligatory public disclosure could serve as a regulation on the companies that undergo external audits sincerely. 

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